October 04, 2022
As electricity rates continue to rise, more and more people are looking to the sun for savings. Going solar is less expensive than ever, and with the help of the Federal Tax Credit, you can lower your initial investment by 30% when you purchase a solar panel system. For some customers, though, buying solar panels is not an option. Don’t let that keep you from saving money.
The Leasing Option
Want to power your home with renewable solar energy without purchasing a solar panel system? By leasing solar panels, you can switch to solar for little to nothing down with a Solar Lease or Power Purchase Agreement (PPA) and lower your electric bill. When you lease a solar system, you won’t save as much as you would if you owned the solar system equipment, but you will pay less than you would for grid-supplied, fossil-fuel power.
Solar leasing is a flexible option for homeowners who want to harvest the benefits of renewable solar power without purchasing a solar panel system. Leasing provides the same dependable energy as purchasing a system, but with little to no upfront costs. And you gain the added benefits of your solar system being maintained and monitored by the third-party owner.
The best candidates for solar panel leasing are homeowners who are ineligible to take advantage of government tax credits. Typically, there is no or little upfront payment, but financing fees can be substantial, with fixed or escalating payments for 10-20 years. While leasing is a viable choice when purchasing is not, SolarCraft offers leasing options with caution because your savings will be lower than if you purchase a system, and there is the potential for complications if you refinance or sell your home.
To figure out if leasing is the best choice for your situation, take time to talk it through with a reputable solar installer.
Purchasing Solar Panels
When you buy a solar panel system, you will see more significant savings compared to leasing a system. And the most effective way to lower your monthly energy costs with a purchased system is to pay cash upfront. If you don’t feel comfortable going that route, there are financing options. You can get the money you need for your solar installation through a home equity loan, a home equity line of credit, or a mortgage refinance.
Purchasing with Cash
You can get the greatest return on your investment by paying cash, which eliminates the interest fees attached to financing. You’ll own your system outright and see immediate savings on your utility bill. Plus, you can lower your purchase price by taking advantage of the 30% Federal Tax Credit.
Solar Loan & Financing
If you choose not to pay in cash, you could combine a solar loan with any government-sponsored financing options available in your area to make the dream of powering your home with the sun a reality. Once the loan is paid in full, you’ll see a significant return on your solar investment.
For more information about purchasing a solar panel system, talk to one of our experts today.
When is it Better to Buy?
If you are able to acquire financing or pay with cash, it’s best to do so. Although the initial outlay to install solar panels is significant, the panels will pay for themselves in a relatively short period of time, typically under 10 years. At that point, your energy savings will more than compensate for the initial investment.
When is it Better to Lease?
If paying cash or financing are not options for you, but you still want to reap the benefits of saving money and powering your home with renewable energy, leasing is the way to go.
Homeowners can save money on their power bills and do good for the planet by installing solar panels, whether they own them or lease them. If you want to get into solar power but can’t afford to make a sizable upfront investment, leasing is your best option. However, buying will save you more money over time.
Ready to go solar? Contact us today and our Solar Energy Consultants will help guide you through the different options.
